South Korea's Top Four Banks to Further Reduce Offline Branches by March
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Synopsis
South Korea's leading banks are reducing their offline branches amid rising mobile banking demand. Despite record interest income, the shift prioritizes convenience and efficiency. The trend raises concerns for elderly customers reliant on face-to-face services.
Key Takeaways
- South Korea’s four major banks are closing more offline branches.
- Record interest income reported in 2024, yet demand for mobile banking rises.
- Closure affects elderly customers who prefer traditional banking.
- Internet-only banks are changing the banking landscape.
- Traditional banks are enhancing mobile services to stay competitive.
Seoul, Feb 9 (NationPress) South Korea's top four banks are set to shutter more offline branches by March, even with their record interest earnings in 2024, attributed to a surge in mobile banking usage, according to data released on Sunday.
The nation's leading lenders — KB Kookmin, Shinhan, Woori, and NH Nonghyup — are projected to operate a total of 3,160 physical branches by the end of March, a decrease from 3,330 at the conclusion of 2023, as per the data.
Shinhan intends to cut down its branches by 57 during this period, resulting in 665 outlets by the end of March, as reported by Yonhap news agency.
Woori aims to close 52 offline branches, bringing its total to 659 outlets by the end of March, while NH Nonghyup and KB Kookmin plan to reduce their outlets by 36 and 25, respectively, resulting in 1,064 and 772 branches.
According to a KB Kookmin official, the move to consolidate branches within a 1-kilometer radius is designed to offer customers more convenient and comfortable face-to-face services.
On the other hand, Hana Bank is looking to expand its outlets from 597 to 602 during the same timeframe.
Critics argue that the closure of physical branches could significantly inconvenience elderly customers who favor traditional banking methods.
KB Kookmin, Shinhan, Woori, and Hana Bank reported a combined interest income of 41.8 trillion won (approximately US$28.7 billion) last year, marking a 3.1% increase from the previous year.
Nonetheless, the trend of minimizing offline branches seems irreversible as more individuals opt for banking through their computers or smartphones, eliminating the necessity for physical visits.
The rise of internet-only banks has transformed banking practices in South Korea, one of the world’s most digitally connected nations. These banks operate 24/7 without requiring physical branches or face-to-face interactions.
In response, traditional banks have been enhancing their mobile banking offerings to maintain relevance in this evolving landscape.
